EPA Issues New Emissions Limits

Yesterday, the Environmental Protection Agency (EPA) issued a final rule that further reduces the sulfur dioxide (SO2) and the nitrogen oxides (NOx) emitted from the electric generation sector. This rule, called the Clean Air Interstate Rule, covers 28 states in the east, the southeast and the mid-west and the District of Columbia.

By 2015, EPA says SO2 will be reduced by 56% and NOx reduced by 61% in those states.

Nuclear power plants generate a significant amount of electricity in these states, preventing 2.8 and 1.0 million short tons of SO2 and NOx, respectively, in those states falling under the annual caps.

The CAIR annual caps on these emissions are 2.5 million tons of SO2 and 1.3 million tons of NOx in the year 2015.

If we don’t keep the nuclear plants in these states operating, the electric industry will essentially have twice the burden they do today to meet EPA’s new limits on these criteria pollutants.

And if we built a few new nuclear power plants in this region, it would sure make it easier to meet those reductions by 2015 – just ten years away!

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Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

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Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

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